Im studying Larry Goins’ book - Real Estate Day Trading and came across his Instant Property Analysis method. It’s basically a quick analysis you run while interviewing a seller by phone so you can make that quick offer. The following is an example of an Instant Property Analysis:
After Repair Value: $100,000
Investment value (70% of $100,000): $70,000
Hard money closing costs (4% of $70,000): ($2,800) $67,200
Taxes, insurance, attorney fees: ($2,250) $64,950
Repair costs: ($15,000) $49,950
Advance expenses and extra closing costs: ($2,400) $47,550
Day traders fee (10% of $100,00): ($10,000)
Maximum Allowable price: $37,550
First offer ($37,550 - 15%): $31,917
Now I have several questions:
#1: According to his book, he automatically inputs $2250 for all his offers reference the Taxes, insurance, attorney costs. Ofcourse that is based in his area. Does anyone know how I can figure out what those costs are in my area so that I can factor it in the formula?
#2: Hard money closing costs. Is 4% the typical average safe enough to factor in an analysis in any area?
#3: Advance expenses and closing costs (usually appraisals, title search, home inspection if house is in very bad condition). He mentions if he’s doing a physical close instead of an assigment, option, or simultaneous closing, he would have to account for extra closing costs. How can I account for extra closing costs in my case? How can I ballpark figure extra closing costs to do this quick instant property analysis?
#4: Last question. PLEASE share your thoughts,opinions, comments, reference this instant property analysis, I’d like to know if there are other better, easier ways, to make that instant offer by phone, and if you have anything better, please do share. Thank you.